Look to the Heygate Estate for what's wrong with London's housing

For a year and a bit I lived in a flat off the Walworth Road, and every morning and evening I would walk the half a mile between Elephant & Castle tube station and home. On one side was the “mugger’s paradise” Heygate Estate, on the other, the Carbuncle Cup-winning Strata SE1. For many reasons, I always preferred the look of the former over the latter.

At the time I’d heard there were only seven people left living in flats there, and the mostly-derelict estate was probably mostly known to non-locals as a setting for films like World War Z and Attack The Block, and the TV shows Luther and Spooks. Steel panels went up, over time, to stop the curious from taking walks around the abandoned buildings, or enjoying the views from the roofs. The Heygate may have still been a home for some, but the world outside treated it as a dead space. Photographers, explorers, and free runners loved it.

For everything that’s wrong with London’s housing and built environment, look to the Heygate Estate, and to what will replace it. Completed in 1974, its 1,200 homes housed more than 3,000 people in spacious, well-lit rooms with all the modern conveniences. Two decades later, its broken lifts, broken lights, piss-soaked corridors and violent crime came to signify everything wrong with the post-war approach to social housing and urban design.

Of course, the reality of what the Heygate was is more complicated than a concrete monstrosity taken over by the allegedly degenerate. Listen to Chris Wood’s “Heygate Heaven”, for example - the voices of residents drift in and out over the the ambient sounds of the estate and surrounding areas. Many of the residents mourn its destruction, even while admitting its flaws:

Glasspool, a teacher, who remains inside his three-bedroom maisonette in Elephant and Castle amid a dispute about compensation, represents the last hurdle in a 15-year project which will see more than 1,200 primarily social-rented homes replaced with more than 2,300 flats and houses, the majority sold for prices currently reaching £380,000 for a one-bedroom flat.

Southwark council, masterminding the transformation with developers Lend Lease, says the scheme brings long-overdue regeneration to an area long blighted by poverty and post-war brutalist housing, and that money it generates will finance thousands of affordable homes.
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None of these 284 homes, currently priced between £350,000 and £1.1m, will be offered at a discount. Instead, Lend Lease has given Southwark £3.5m to spend on social housing elsewhere and will contribute to a new leisure centre.

A report by council officers said Lend Lease baulked at providing social units as this would require a second lobby and lift shaft to separate the two types of resident, adding: "Not doing so would have significant implications on the values of the private residential properties.”

That last bit is particulalry horrible, as it reveals the base motivation for the project - maximising profits from the redevelopment, and doing so by keeping the riff-raff out. Developers across the city have been doing this, with gates within gates to make the division especially clear.

The simplest way to get across how terrible a deal this is for everyone involved in the Heygate's regeneration is to simply quote the figures involved:

What has happened here is that Southwark Council has lost money on evicting the Heygate Estate for the benefit of Lend Lease, with no prospect of getting anything in return for it. In the process, an established community has been scattered throughout the borough and beyond, while the Council obfuscated what was happening and fought to keep key details secret until it was too late to stop it.

The Heygate Estate occupied a large site next to a major transport interchange in an inner London borough, and its residents had the temerity to remain poor while the land they lived on became more valuable. When people talk about the "social cleansing" of London, this is it. The classism and snobbery directed towards brutalism (but only when occupied by certain groups - see: the Barbican) compounded the Heygate Estate's fate. Read through the stories from former residents, archived on Heygate Was Home, for proof that it wasn't always considered a slum, or an eyesore, by the people who mattered.

We're losing London to the forces you can see at work at the Heygate. Regeneration schemes that push the existing community out to neo-banlieues and replacing them with white collar professionals and students living in inferior-quality buildings; councils pleased to turn a blind eye so they have higher rate payers within their boroughs; developers getting given land at a fraction of its true value on the promise of future profits that mysteriously never arrive; a revolving door between local authorities and regeneration consultancy and PR firms. The people affected by these phenomena are the last people to be given a say in, let alone be given control of, their lives. God forbid they should ever be given a way to choose how their city changes, too.

The Autumn Statement proved it – we need a real alternative to austerity, now

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor

John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015.